Financial institution officers and a bank consumer had been charged inside the Chicago area Tuesday with fraud for submitting a false loan application to the SBA (SBA) for nearly $4 million.
James Graber and Kristin King, along side Ryan Cole of Garland, Texas, were charged by a federal grand jury in Rockford with wire fraud in reference to a mortgage application made to the SBA.
Authorities charged Cole with counts of making false statements to the SBA on a loan application, Graber and King have been each charged with one be count.
The case centers around SunLee Development, which owned a industrial building at 4001 North Perryville Rd., in Loves Park, Illinois. SunLee acquired three loans totaling greater than $3 million at a nearby financial institution in which Graber, 57, was employed as a vice president and King, forty four, was also employed as a VP and government guaranteed lending specialist. Cole, 45, and a member of SunLee, guaranteed the three loans and therefore was liable in the event of default.
SunLee fell behind on its loan because of tenants at 4001 North Perryville failure to pay rent. The indictment alleges that Cole helped tenants at 4001 North Perryville to apply for an SBA guaranteed loan and to purchase the building from SunLee. The tenants and Cole are known as the Perryville Investment Group.
The indictment states that in March of 2012, Cole, Graber and King submitted a $3.98 million loan application to the SBA for the Perryville Investment Group that contained false statements and hid material statistics. The Perryville Investment Group subsequently defaulted on the SBA loan.
Each count of wire fraud, making false statements and concealing material facts to the SBA comes with a maximum penalty of up to 30 years in prison and a fine of up to $1 million.
If you have defaulted on an SBA loan, you may be eligible for an SBA loan offer in compromise. The SBA loan offer in compromise may allow you to settle the debt for less than the full amount. Contact Protect Law Group at 1-888-756-9969 today for a consultation with a qualified SBA workout attorney.
Millions of Dollars in SBA Debts Resolved via Offer in Compromise and Negotiated Repayment Agreements without our Clients filing for Bankruptcy or Facing Home Foreclosure
Millions of Dollars in Treasury Debts Defended Against via AWG Hearings, Treasury Offset Program Resolution, Cross-servicing Disputes, Private Collection Agency Representation, Compromise Offers and Negotiated Repayment Agreements
Our Attorneys are Authorized by the Agency Practice Act to Represent Federal Debtors Nationwide before the SBA, The SBA Office of Hearings and Appeals, the Treasury Department, and the Bureau of Fiscal Service.
Client's small business obtained an SBA COVID EIDL for $301,000 pledging collateral by executing the Note, Unconditional Guarantee and Security Agreement. The business defaulted on the loan and the SBA CESC called the Note and Guarantee, accelerated the principal balance due, accrued interest and retracted the 30-year term schedule.
The loan was transferred to the Treasury's Bureau of Fiscal Service which resulted in the statutory addition of $90,000+ in administrative fees, costs, penalties and interest with the total debt now at $391.000+. Treasury also initiated a Treasury Offset Program (TOP) levy against the client's federal contractor payments for the full amount each month - intercepting all of its revenue and pushing the business to the brink of bankruptcy.
The Firm was hired to investigate and find an alternate solution to the bankruptcy option. After submitting formal production requests for all government records, it was discovered that the SBA failed to send the required Official 60-Day Pre-Referral Notice to the borrower and guarantor prior to referring the debt to Treasury. This procedural due process violation served as the basis to submit a Cross-Servicing Dispute to recall the debt from Treasury back to the SBA and to negotiate a reinstatement of the original 30-year maturity date, a modified workout, cessation of the TOP levy against the federal contractor payments and removal of the $90,000+ Treasury-based collection fees, interest and penalties.
Clients executed several trust deeds pledging seven (7) real estate properties and unconditional personal guarantees for an SBA 7(a) loan from the participating lender. The clients' small business failed and eventually defaulted on repayment of the loan exposing all collateral pledged by the clients. The SBA subsequently acquired the loan balance from the lender, including the right to liquidate and collect all pledged collateral pursuant to the trust deed instruments.
The Firm was hired to negotiate separate release of lien proposals for all 7 real estate properties. In preparation for the work assignment, the Firm Attorneys initiated discovery to secure records from the SBA and Treasury's Bureau of Fiscal Service. After reviewing the records and understanding the interplay between the lender and the SBA, the attorneys then prepared, submitted and negotiated the release of lien (ROL) for each of the 7 real estate properties for consideration.
After submitting the proposals, the assigned SBA Loan Specialists approved each ROL package - significantly reducing the total SBA debt claimed.
The clients are personally guaranteed an SBA 7(a) loan. The SBA referred the debt to the Department of Treasury, which was seeking payment of $487,981 from our clients. We initially filed a Cross-Servicing Dispute, which was denied. As a result, we filed an Appeals Petition with the SBA Office of Hearings and Appeals asserting legal defenses and supporting evidence uncovered during the discovery and investigation phase of our services. Ultimately, the SBA settled the debt for $25,000 - saving our clients approximately $462,981.
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